Management at the troubled PCEA Milele Beach Hotel in Mombasa has detailed how initial loans taken for property acquisition and expansion snowballed into a heavy financial burden, threatening the facility with receivership.
The explanation comes amid growing public scrutiny following an appeal by the Presbyterian Church of East Africa (PCEA) to raise Sh700 million to rescue the asset. The fundraising effort sparked criticism after a viral video surfaced showing church clergy asking members for contributions, with some viewers objecting to remarks that appeared to frame the hotel’s rescue as an offering to God. Critics and members alike questioned why church funds should bail out a struggling commercial entity rather than support core religious and community programs.
Responding to the backlash, PCEA Secretary General Dr. Robert Waihenya attributed the financial crisis to a combination of terror attacks, the COVID-19 pandemic, costly buyer litigation, and compounding loan interest. He also characterized the situation as a form of spiritual warfare.
According to Waihenya, the current church leadership inherited the underlying issues from an earlier acquisition:
“They were given big awads, someone who had paid Sh3 million was awarded Sh7 million. The one who had paid the most was Sh8 million but because of loss of income the court awarded them a very hefty award,” Waihenya explained.
By the time the 24th General Assembly leadership assumed office, accumulated interest and penalties had pushed the total debt past Sh1 billion.
Efforts to resume construction led to a dispute with the lending bank after rumors circulated that PCEA had taken a second loan from another institution. Waihenya clarified that ongoing construction was funded through the Sh125 million previously raised by members, not a new loan facility. Nevertheless, the disagreement accelerated bank steps toward receivership.
Speaking to congregants at Kayole church during a Sunday service, Waihenya stated that the church has paid over Sh900 million toward the loan over the years and confirmed that no new loans have been taken during his six years in office. He rejected calls to sell the property, citing the recent completion of a Sh300 million church on the site.
“The bank called me saying they are coming to assess the status of the hotel, but all they wanted to see was whether construction was going on to prove that we had taken a loan, but that was not a loan.”
“The truth is there’s no loan we have taken for the six years we have been in office,” Waihenya told congregants at Kayole church during a Sunday service.
PCEA continues its public appeal to raise Sh700 million to clear the outstanding debt and save the hotel from auction.
“This is a spiritual problem, and that is why I have stood and said we are not selling,” he asserted.
The post How PCEA’s Sh650M Milele Hotel Loan Snowballed Into a Sh1B Debt Crisis appeared first on Nairobi Wire.
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